Another round of inflation is a bigger risk than a recession, Goldman Sachs economist says

A customer refuels a vehicle at a Thornton's Inc. gas station in New Albany, Indiana, U.S., on Thursday, June 27, 2019. The national average for unleaded fuel is $2.72 a gallon, down 15 cents from last year's Fourth of July holiday. The lower prices are motivating a record number to hit the road, with 41.4 million commuters expected to travel by automobile, according to AAA. Photographer: Luke Sharrett/Bloomberg via Getty Images (Credit: Luke Sharrett/Bloomberg via Getty Images)

Good morning, Peter Vanham here in heat-stricken Geneva, filling in for Alan this week. 

At the half-way mark of 2023, I checked in with Goldman Sachs economist Daan Struyven for an updated economic outlook. His prediction felt a bit like summer here: hot, in need of a cool breeze. 

Back in winter, Goldman economists surprised many with their bullish outlook for the U.S. economy, when many were still expecting a recession. This time around, Goldman has another surprise prediction: the risk of a second coming of inflation is higher than that of an immediate recession.